Is High Tech Too High Risk For Connecticut?

State Aims To Shed Its Stodgy Image

July 05, 1998|By WILLIAM HATHAWAY; Courant Staff Writer

In the past year, two drug companies have asked Mark Cochran to come back to Connecticut. But he's not leaving California.

With a wave at the swank lobby of San Francisco's Ritz Carlton this spring, the 44-year-old scientist and dealmaker points to a scene he never found during seven years in Connecticut: a dozen entrepreneurs with cell phones pacing the Persian rugs of the Nob Hill Hotel.

``Why would I leave the biotechnology capital of the world?'' Cochran asked.

His response illustrates a missing piece in Connecticut's drive to make technology an engine of growth: a culture that embraces risk and nurtures entrepreneurs such as Cochran.

Struggling to shed a stodgy actuarial image, resource-rich Connecticut ranks 48th, just above Kansas and Louisiana, in the rate it has created new technology companies during the 1990s, those familiar with technology companies on both coasts say.

``We just don't seem to trust the cool idea. In Connecticut, risk still seems to be a four-letter word,'' said Laura Kent, executive director of the Connecticut Technology Council, a nonprofit advocacy group promoting the state's high-tech industry.

So Connecticut is scrambling to make more loans to start-up companies, targeting economic development aid to key technology sectors and working to exploit its rich academic base, all in hopes of creating a bold new image for the Land of Steady Habits.

Technology boosters such as Kent and Gov. John G. Rowland Jr. are like proprietors of a new restaurant. They are proud of their high-tech menu.

They note that when software, photonics, telecommunications and biotechnology companies try Connecticut, they tend to thrive. For instance, software development has been one of the fastest growing segments of the state economy during the recession-plagued 1990s. And they tout the state's highly educated workforce and good quality of life.

But compared with the rest of the country, Connecticut just hasn't had much luck getting new companies to sit at its table.

``This may sound too deterministic, but historically the people in this country who take risks, are willing to sacrifice, to shed their blood, have moved west,'' said George Poste, chief of science and technology for the Philadelphia- based pharmaceutical giant SmithKline Beecham. ``The West is inherently experimental.''

It is that experimental atmosphere that Cochran said he missed after he left Meriden-based MicroGeneSys Inc. in 1989, a company he helped form, and joined Bayer Corp. in West Haven. He rediscovered that atmosphere when Bayer moved him to the San Francisco Bay area and, he said, it is the reason he stayed last year rather than accept a transfer back to West Haven.

Today, he puts together teams of free-lance scientists to work on promising research. Such projects, he said, would be hard to do without the Bay area's strong scientific talent and would happen only slowly at a big drug company.

``At a [pharmaceutical company] if you have an idea, it has to be discussed, budgeted, sold internally, measured and by the time you get around to doing it, it's already been done,'' Cochran said.

Connecticut has a strong pool of about 5,000 researchers working at major pharmaceutical research centers in the state, yet it has only produced 10 biotechnology companies. Northern California has about 200 companies, and the Boston area is not far behind. Neither area has a large drug company presence.

Some say Connecticut, after nearly a century of dependence on large manufacturing and insurance companies, remains wedded to a corporate culture that tends to avoid the risks that lead to the creation of small technology companies.

``We were so great at the old economy, we in New England never moved into the new technology era with anywhere near the enthusiasm of other parts of the country,'' said David Birch, president of Cognetics Inc., a Cambridge, Mass., economic research firm. ``The cultural thing means everything in the new economy.''

Mark G. Edwards, managing director of Recombinant Capital, a venture capital firm in San Francisco, was even more harsh in his assessment. ``Connecticut just isn't on the technology map yet,'' he said. ``My God, Hartford is the risk management capital of the world.''

Stefan Bothe, a German native who co-founded the business software company FlexiInternational in Shelton, notes that when he hires people from large corporations on the East Coast, they tend to be more interested in 401k plans or in the amount of vacation they'll get than in their chance to gain a large stake in a growing company.

``In California, you can't hire an employee in a start-up unless you give them stock in the company,'' said Bothe, who has worked and studied on both coasts. ``Here, you offer an engineer $100,000 in salary or $50,000 and stock, they say, give me the $100,000.''